The entry into force takes place on the day that the legislative package — which was approved by the European Parliament last week and this Monday by the Member States in the Council — will be published in the Official Journal of the EU.
Until today, EU countries (including Portugal) had to send simplified versions of their Stability Programs to Brussels, but, as new European budgetary rules come into force, this deadline no longer exists and countries will have more time , by September, to submit a national plan to the European Commission.
It is now planned that, in the summer, Member States will submit their multi-annual plans to Brussels, covering four or seven years, which will then be discussed with the community executive so that, in 2025, the rules will be fully applied.
In an interview with Lusa published last February, the European Commissioner for Economy, Paolo Gentiloni, said he expected the new EU budgetary rules to fully come into force in 2025, given the agreement of the Member States, which means that “the period between The summer and autumn of this year will be very hot because there will be negotiations between Member States and the Commission on multiannual plans”.
These will be the new national budgetary-structural plans (they will no longer be called national reform and stability programs) and will include measures to correct macroeconomic imbalances and guidelines on priority reforms and investments for four or seven years.
EU budgetary rules were suspended following the Covid-19 pandemic and the war in Ukraine, to allow Member States to deal with crises, and a consensus was then reached on the need to review and update legislation on economic governance before the Stability and Growth Pact was resumed, originally created in the late 1990s and considered already ‘outdated’.
It is now planned to resume budgetary rules after the suspension due to Covid-19 and the war, but with a new formulation, despite the usual ceilings of 60% of Gross Domestic Product (GDP) for public debt and 3% of GDP for the deficit.
Defined is a reduction in public debt of at least one percentage point per year for countries with a debt ratio above 90% of GDP (as is the case in Portugal) and half a percentage point for those between this ceiling and the level of 60% of GDP.
It will be up to Member States to prepare their national plans, which the European Commission will evaluate, defining a period of at least four years for the debt to be placed on a downward trajectory, with this period being able to be seven years in the face of reforms and investments (such as those included in the Recovery and Resilience Plans).
An annual public spending cap will be introduced for maximum diversion.
Non-compliant countries may face excessive deficit procedures and fines.
ANE // MSF
Lusa/end
